Sansera Engineering - Targeting 20% RoCE Amid Executing Growth Capex: ICICI Securities

ICICI Securities Report

We interacted with the management of Sansera Engineering Ltd. to get mid-year update on its business execution and outlook ahead. Following are the key takeaways:

1. Revenue is on course to meet the target of ~40% growth in exports in FY24, including ~50% growth in aerospace segment;

2. supplies to Triumph and Harley for the newlylaunched indigenised models would add to two-wheeler segment revenue growth along with continued premiumisation of overall two-wheeler market;

3. Ebitdam is on track to be at 17-18% in FY24 and inch up potentially higher in FY25 driven by the rising mix of exports/aerospace;

4. despite capex of Rs 2.8-3 billion per annum, Sansera is confident of crossing ~20% pre-tax return on capital employed by FY25.

We retain 'Buy' on Sansera with an unchanged target price of Rs 1,133, implying 20 times FY25E earnings.

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